9. Long-Term Debt

Long-term debt includes:

	June 1, 2013			December 1, 2012
Nonrecourse mortgages:
6.30%, due May 1, 2014	$	196		$	289
5.73%, due August 1, 2015	18,820			19,018
8.13%, due April 1, 2016	3,777			3,943
7.0%, due October 2, 2017	5,900			6,016
Variable rate mortgage, due October 2, 2017*	6,645			6,726
Variable rate mortgage, due February 1, 2019*	11,275			11,396
Variable rate mortgage, due August 1, 2019*	7,953			8,034
Variable rate mortgage, due January 27, 2020*	4,016			4,067
Total nonrecourse mortgages	58,582			59,489
Revolving line of credit	—			—
Capital leases	102			72
Total	58,684			59,561
Less: current portion	(1,949		)	(1,869		)
Total long-term debt	$	56,735		$	57,692

* Griffin entered into interest rate swap agreements effectively to fix the interest rates on these loans (see below).

As of June 1, 2013, Griffin was a party to four interest rate swap agreements related to nonrecourse mortgages on certain of its real estate assets. Griffin accounts for its interest rate swap agreements as effective cash flow hedges (see Note 4). No ineffectiveness on the cash flow hedges was recognized as of June 1, 2013 and none is anticipated over the term of the agreements. Amounts in other comprehensive income (loss) will be reclassified into interest expense over the term of the swap agreements to achieve fixed rates on each mortgage. The interest rate swap agreements do not contain any credit risk related contingent features. In the 2013 six month period, Griffin recognized a gain (included in other comprehensive income) before taxes of $424 on its interest rate swap agreements. In the 2012 six month period, Griffin recognized a loss (included in other comprehensive income) before taxes of $882 on its interest rate swap agreements.

As of June 1, 2013, $750 is expected to be reclassified over the next twelve months from accumulated other comprehensive loss to interest expense. As of June 1, 2013, the liability for Griffin’s interest rate swap agreements was $2,401 and is included in other noncurrent liabilities on Griffin’s consolidated balance sheet.

On April 1, 2013, Griffin Land entered into a modification agreement for its 5.25% nonrecourse mortgage loan with First Niagara Bank due January 27, 2020. The modification agreement changed the loan’s interest rate from a fixed rate of 5.25% to a variable rate of the one month LIBOR rate plus 2.5%. The loan modification did not change the loan’s collateral or maturity date. Griffin Land paid $70 to First Niagara Bank for the loan modification, plus transaction costs. Because the difference between the present values of the future payments under the existing loan and the modified loan is greater than 10%, the loan modification is accounted for as a debt extinguishment. As such, all deferred costs related to the existing loan with First Niagara Bank ($216) and the fee paid to First Niagara Bank for the modification agreement are reflected as a loss on debt extinguishment on Griffin’s consolidated statement of operations. Concurrent with the completion of the loan modification agreement, Griffin Land entered into an interest rate swap agreement with First Niagara Bank to fix the interest rate on its nonrecourse mortgage loan with First Niagara Bank at 3.91% for the duration of the loan.

On April 24, 2013, Griffin closed on a new $12.5 million revolving credit line with Webster Bank (the “Webster Credit Line”). The Webster Credit Line is for two years with an option for Griffin to extend the credit line for a third year. The Webster Credit Line replaced Griffin’s $12.5 million credit line with Doral Bank (the “Doral Credit Line”) that was scheduled to expire on May 1, 2013. Interest on the outstanding borrowings under the Webster Credit Line will be at the one month LIBOR rate plus 2.75%. Interest on outstanding borrowings under the Doral Credit Line was the higher of the prime rate plus 1.5% or 5.875%. The Webster Credit Line is collateralized by Griffin Land’s properties in Griffin Center South, aggregating approximately 235,000 square feet and an approximately 48,000 square foot single-story office building in Griffin Center. These are the same properties that collateralized the Doral Credit Line. There were no borrowings under the Doral Credit Line in fiscal 2012 or in the 2013 six month period and there were no borrowings under the Webster Credit Line as of the date of this Quarterly Report on Form 10-Q.